In 2008, under FAR 52.203-13, “Contractor Code of Conduct and Business Ethics and Conduct” – the clause promulgated that appears in all Federal prime contracts that exceed $5 million and have a period of Government Contractor Code of Conduct and Business Ethicsperformance of 120 days or more and is required to be included in subcontracts of that dollar amount and period of performance.

As a matter of practice, the Federal government initiated greater scrutiny on government contractors for lack of sufficient internal policies and controls.

If you are doing business with the government, you should have already implemented your contractor code of ethics and Business Conduct Policy, codes of ethics and internal contract compliance program. When issues arise or audits occur, having some level of ethics control can help to mitigate adverse results.

Code of Ethics in Government Contracting – Basic Statutory Requirements

 Under FAR 3.10 Contractor code of conduct and business ethics,  government contractors should have a written policies in place. To promote compliance with the statutory requirements, you should have an employee code of ethics in government contracting and compliance training program plus an internal control system that—

(1) Are suitable to the size of the company and extent of its involvement in Government contracting;

(2) Facilitate timely discovery and disclosure of improper conduct in connection with Government contracts; and

(3) Ensure corrective measures are promptly instituted and carried out.

Having Your Contractor Code of Conduct and Business Ethics Can Avoid Suspension or Debarment

When companies are targeted for suspension and debarment actions, convincing the officials that you have a Contractor Code of Ethics can go a long way when you propose an Administrative Agreement to give you company another chance.

The Contractor Code of Conduct should be made available to each employee working on the contract. If you ever become subject to a government investigation, or subject to a debarment or suspension action, you will find that such an investment can save your business’ future and the ability to continue to do business with the federal government.

Disclosure of wrongdoing is a must. As a matter of contractual and legal obligation, you are also are required to make disclosures to the government when you have “credible evidence” of a violation of certain criminal laws or the Civil False Claims Act.  

Awareness policy required. Unless you are a small business or the contract is to provide a commercial item, the clause also requires you to have a Code of Ethics for Contractors and Business Conduct awareness policy and an internal control system.

See relevant information about responsibility determinations and business ethics when you submit a government proposal.

Consider the above-mentioned information requirements when establishing your Code of Ethics for Contractors, whether you are new to government contracting or an existing provider of products of services (although there are exemptions, you should still go over and beyond the basic requirements).

Call our government contract compliance lawyers  for help with your contractor code of conduct and ethics for contractors at 1-866-601-5518 for a FREE INITIAL CONSULTATION.

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